IDC Reports on BI Sales: Which Vendors Are Hot?IDC Reports on BI Sales: Which Vendors Are Hot?

The BI market grew 11.5 percent in 2006 to reach $6.25 billion in worldwide software revenue. That's healthy growth, but there's little evidence that BI is spreading to a broader base of business users. These are just two of the headline conclusions of IDC's Worldwide Business Intelligence Tools 2006 Vendor Share report, released June 29.

IDC's study examines the BI tools market from 2004 to 2006, and it includes revenue, marketshare and sales growth figures for more than 20 leading vendors. The top-five vendors in BI tools revenue in 2006 were, in order,

Business Objects ($894 million), SAS ($679 million), Cognos ($622 million), Hyperion/Oracle ($529 million, combining their revenue) and Microsoft ($480 million). The growth leader among these players was Microsoft, which had a 28.1-percent revenue increase in 2006. The second-fastest-growing company among the top five was SAS, with a 16.6 percent revenue increase. See chart at right.

IDC breaks the BI tools market into two segments: query, reporting and analysis (QRA) tools, and advanced analytics. QRA software covers ad hoc query and multidimensional analysis as well as dashboards and reporting tools. The top-five vendors in QRA, as measured by 2006 revenue, were Business Objects, Cognos, Microsoft, Hyperion and SAS. Among these top-five vendors, Microsoft and SAS again had the fastest growth rates, at 27.7 percent and 23.0 percent, respectively.

Advanced analytics software includes data mining and statistical software, and the top-five vendors, by 2006 revenue, were SAS, SPSS, Visual Numerics, Oracle and Teradata. Microsoft and SPSS had the highest growth rates in this group, at 40.0 percent and 14.8 percent, respectively. SAS dominates the advanced analytics category with more than twice the revenue of its nearest rival (at $382 million versus $174 million for SPSS).

The report concluded that "IDC does not yet see a substantial impact on the market from the strategy and marketing messages of most BI vendors seeking to reach a broader use base." But could revenue-based calculations be misleading given that pricing is getting more competitive?

"If BI vendors were reaching beyond the 15 to 20 percent of users they're currently reaching, the revenue numbers would reflect a faster growth rate," report coauthor Dan Vesset told Intelligent Enterprise. "The average price per user will come down to some extent, but that's a long-term trend."

Which vendors are poised to reach a broader audience? "I would put Microsoft and Business Objects ahead of the pack," said Vesset. "Microsoft partly because of its [aggressive] pricing and partly because of its reach. With its base of Crystal users, Business Objects also has a good opportunity to penetrate a broader audience."

Vesset said most of Microsoft's growth is still ahead. "Microsoft has been selling primarily SQL Server with Analysis Services and Reporting Services," he explained. "They're really pushing hard on Excel 2007 as the front end and deploying it all through SharePoint. When people start actually doing that, I think you'll start seeing broader use of BI within Microsoft shops."

Two notable up-and-comers in the combined BI Tools ranks were QlikTech and Panorama, which scored 97-percent and 67-percent growth rates in 2006, respectively, though neither company was in the top ten in terms of total revenue. The slowest growth rate in 2006 was Business Objects', at 7 percent.

"Business Objects was transitioning to its XI platform in 2006, so that hurt its revenue during the first two quarters," said Vesset. "With its Crystal base, Business Objects is also much more exposed to Microsoft."

IDC observed that the advanced analytics category is growing with demand for forecasting, optimization and other decision-support techniques. "There's so much data available, and companies understand that they need to do something more advanced with it," said Vesset. "Many companies are trying to predict which customers may be churning and which customers may be open to cross selling or up selling. Other companies are using advanced analytics to optimize supply chains and pricing, both online and in-store retail."

An excerpt of IDC's original report is available for download at SAS's site, and it includes extensive detail on sales, marketshare and company-by-company performance.